H-1B debate flares as EE jobless rate hits 7 percent

The Work Circuit ^ | April 15, 2003 | Margaret Quan

[mabelkitty]

MANHASSET, N.Y. — Unemployment among electronic engineers soared to 7 percent in the first quarter, the U.S. Department of Labor said last week, surpassing the national jobless rate of 5.8 percent recorded in March.

At the same time, some industry groups are considering lobbying for legislation to raise the annual quota for H-1B visas and allow more foreign technical workers into the United States.

[Billy_bob_bob]

I'd like to chip in an experience that I got to go through, along with several of my friends. We had the misfortune to come up with a great new product, something that would make a lot of money. We went around to VC's trying to get funding. We went through "due diligence", and then we got totally screwed. There is a big company out there that got started through acts of total fraud, deception and theft. Somehow I imagine it is not the only one. We got to spend years and years in court suing, before finally settling for an insultingly small settlement because we didn't have the resources to fight in court for decades. The most amazing thing I learned from the experience was not how badly we got screwed, it was how routine it all was.

Now, tell me again how I'm supposed to fall down and worship CEO's? Because from what I have experienced, they are ethically challenged at best, and I'm really struggling to keep my comment as mild as that.

If I really wanted to curse someone, I would simply wish that they got to live through what I've gotten to live through. Go ahead and worship CEO's if you want to, after they've kicked you in the face a few times you might change your tune.

And no, I'm not going to say what company it was. I can't afford to be sued by billionaires.

[dfwgator]

I think (or hope) that you are right. Here's how I see it. In the late 90s, there was a huge ramp-up as companies replaced their antiquated systems in anticipation of Y2K. So from day one in 2000 you had an immediate drop-off of demand for technical labor. On top of that the economy slowdown meant that projects dried up. There are simply not enough projects to keep qualified people employed. I talk to a lot of software developers and almost to a man they tell me that companies are abandoning the offshore projects and bringing them back in house. What we need to get things going are projects, that means companies need to feel confident enough in the economy to justify that spending. Once that happens, things will improve. Of course that's just my opinion, I could be wrong.

[MattAMiller]

There's nothing wrong with the quality or quantity of American technical workers. This problem will resolve its self when companies begin to realize that Indians are not the wonder-workers they've been advertised as.

[discostu]

Well first off you got ripped by venture capitalists which aren't the same thing as CEOs (my old boss called them "loan sharks". Secondly not all CEOs and or venture capitalists are lieing theiving bags of crap. Thirdly the basic rules still apply, with CEOs and VCs there would be NO companies ANYWHERE and NO jobs period. I've been kicked in the face plenty, my outline for why the dot-com bubble burst comes from bitter first hand experience. Doesn't change the basic facts, CEOs and VCs make companies, companies make jobs. If you had incorporated and copyrighted before seeking venture capital (which is the right way to do things, never show anybody anything that isn't copyrighted ever) YOU would be a CEO (and maybe a VC) right now. Still willing to say they're all evil people?

[ThinkDifferent]

I talk to a lot of software developers and almost to a man they tell me that companies are abandoning the offshore projects and bringing them back in house.

That's encouraging. Perhaps management is finally realizing that just like doubling the number of people assigned to a project won't halve the time, foreign workers aren't drop-in replacements for Americans. Engineers are not fungible.

[Billy_bob_bob]

I'm not saying they are evil people, but I am saying that many of them are very "ethically challenged". You are the one putting words in my mouth, and I really don't appreciate that.

I have no problem with honest businessmen, I've run my own business before, but I have a very big problems with people with no regard for laws and rules of behavior. The sad fact is that our legal and political systems are broken, and this encourages undesireable behavior on the part of those who have the most power and influence in our society.

P.S. We had "non-disclosure" agreements and legal council before we talked to VC's. We still got screwed. It all comes down to who has the most money to spend on the case.

[discostu]

Y2K fueled it, but we can't underestimate the effect of a whole bunch of DUMB business plans. Some one above referenced the South Park episode that really outlined the problem, the pure quote is:
Phase 1 - steal underpants
Phase 2 - ?
Phase 3 - profits

That describes hundred of businesses that went under. They had this nifty idea and were sure they could make a pile of money on it if only they could figure out phase 2. Not knowing phase 2 didn't stop them from grabbing up investment money though, and because everybody thought the tech sector was the path to unending profits a bunch of VCs (and regular investors since many of these companies went public, I remember 1 trading at $20+/ share and didn't even have a business plan, forget little things like product and revenue stream) didn't worry about the details (due diligence became a formality). And blammo.

Eventually we'll build back up with smart business plans, but it'll take a while. Meanwhile people will be leaving the industry and things will meet somewhere in the middle.

[dfwgator]

"Us gnomes are geniuses at corporations."

[flamefront]

Wrong, that's wishful thinking. The software market is still dried up here, as of today.

Also consider this huge statement made by HP regarding hiring:

"We're trying to move everything we can offshore," HP Services chief Ann Livermore told Wall Street analysts at a meeting [Dec. 2002].

Also BTW these arguments by Norman Matloff before the House Judiciary Committee, titled, 'Debunking the Myth of a Desperate Software Labor Shortage' from 1998 still apply.

[familyofman]

"Not sure where this goes,"

Just another group of domestic (US) workers realizing what a global economy means. Low wages have become king, the low wage, third world, countries are getting the jobs. Did anyone complain when steel industry, auto industry, textile, shoe....jobs went overseas - I don't recall complaints. It was always the fault of the workers, not the CEOs or Boards of Directors.

I saw help wanted signs at both Target & WalMart over the weekend.

[overtaxed_canadian]

Nothing. Convince him to go to med school. I made the mistake of going into Computer Engineering and am paying for it now.

[dfwgator]

"We're trying to move everything we can offshore," HP Services chief Ann Livermore told Wall Street analysts at a meeting [Dec. 2002].

I suspect in due time they will learn their lesson the hard way. Granted, there is a place for some offshoring, especially when it comes to the more mundane tasks.

[discostu]

There are many everybody that's ethically challenged doesn't really matter.

See now you're finally moving away from crass generalizations. Before it was "CEOs", now it's "bad CEOs". Now you're making sense, before you weren't.

Having been along for a similar ride (we didn't get ripped, but eventually a big VC firm looked at us and were shocked and amazed we hadn't been ripped off because we'd done the same thing as you) I know the drill, non-disclosure is nice but nothing talks like copyright. The difference between non-disclosure infringement payouts and copyright infringement payouts is the difference between your story and owning the company that screwed you (copyright payouts can be everything they earned from the infringement, promisory infringements tend to have negligible payouts). You've got my full sympathy and I agree that the people that ripped you off were bastards. But there are plenty that are ethical and, as I've been taught, there are ways to gaurd against the unethical (copyright law is very well established and most of the hard work has already been done by the government, doesn't take nearly as good a set of lawyers to win copyright cases).

[discostu]

Hey that somebody was you. So we're on the same page here.

[discostu]

You're in the deadzone dude. Much like how long after the automotive industry had rebuilt Detroit was still screwed Silicon Valley will be hurting for a looooong time. The industry that hosed the economy will heal last, the location that relied on that industry the most will be hosed the longest.

[A. Pole]

Any suggestions, freepers?

Let him study something for fun and knowledge for its own sake like philosophy or history of art. And let him be careful to shop for the lowest price so he does not acculumate too much debt.

Or if he wants career let him study law, medicine or go into politics. Military career as a officer also has future.

If he insists on high tech - let him study Chinese or Hindi.

[mabelkitty]

They all are moving them offshore.

Even customer service jobs and call center positions and other traditionally female entry level positions are leaving.

[mabelkitty]

Don't tell me about it - I wasn't even out of elementary school at the time.

[mabelkitty]

Riight.

Just like all the other jobs that moved offshore.

Name one that came back. Just one. Any one.

[tyen]

What careers in engineering do have good job potential? (obviously computer programming and electronic engineering aren't in high demand).

You need to define "good job potential" and "high demand", preferably in terms of income for a geographic location, and number of weeks to replace a job.

There are an awful lot of people out there currently unemployed who think $80K a year in Central Texas is just dandy. To give you a reference point, I just started my own consulting company. I will book about six months of work this year; the rest of the time I will be deliberately taking time off to work on sales, marketing, and infrastructure for the company. Even at that reduced utilization rate, I am on track to book six figures of income this year in the Central Texas area.

Finding contracts that see me flying each week to the client site for $80 per hour (or more) plus expenses, which works out to about a $120,000 per year full time job including basic benefits (catastrophic medical insurance, long term disability, and a SEP-IRA), takes about 2-5 weeks. Drop that to $50 per hour plus expenses, translating into about the $80K full time job, takes about 1-3 weeks. Drop even further to $30 per hour plus expenses, which roughly translates into a $50,000 full time job, and I can almost pick up the phone and get a contract.

Already about 80-90% of unemployed folks out there who would be qualified to do the same work that I perform will disqualify themselves at this point simply because weekly travel is not an option for their personal choices. I know this because I've tried to recruit new employees.

To even make it into the qualifying group however, was relatively easy on the technical front. I know plenty of people who will run rings around me in programming, IQ, and virtually any other aptitude test you care to consider. In other words, my intelligence is above average, but not by terribly much. It did however, take about 6 years of weekly commuting working for other consulting companies, and initially I couldn't even go home except for once every two weeks. Add in constant honing of soft skills, as well as continual retraining. I was also willing to work on the "plumbing" of IT, stuff that is tedious, involved mind-numbing detail, plenty of politics, and just about as unglamorous as it gets in the software world. It is very close to systems administrator's work (and in fact some of it is systems administration), but including yet another abstracted level. The best description I've heard of my kind of work is "ERP for IT".

The reason this kind of work still exists, and still pays relatively well, is because it concentrates upon tangible benefits to the bottom line of the business. That is why work on software accounting systems for example, still holds up fairly well. But for kids who are still in the "I want to write the Next Great American Video Game" phase (been there, done that), this is about as boring a future as imaginable for them.

By all means encourage your children to pursue the foundation necessary for a technical career. The rigorous critical thinking skills that secure a successful school track record in math, science and literature (half or more of my time is spent communicating technical concepts in business terms, and my years spent appreciating literature handsomely paid off) will serve them well in whatever they decide to pursue, technical or not. However, the reality of the software industry is that most programmers are employed for in-house work by businesses, and a lot of that is getting outsourced or obsoleted by ever-capable off the shelf software. Only a few truly gifted and exceptional programmers break into the game houses, and the competition is intense because it is so glamorous. That pretty much leaves only business software for areas of growth: any software that helps businesses save or make money, and most of this stuff is pretty prosaic for kids just getting into programming, unless you are talking about building trading models for hedge funds or similar stuff, which can get pretty hot and heavy with applied CS theory.

I think future success in the software industry boils down to understanding basic free market forces, just like in almost any business. If your children don't mind finding a market need and fulfilling it, and deriving their satisifaction from internal motivations that are not heavily dependent upon the form of how they serve the market, then they won't mind retraining, staying nimble, and enjoying the ride for its lessons even when it gets rough. From my limited perspective, it appears that surviving the future means rewriting the old rules of what it means to have a job, such that many individuals return to a more freelance style business culture that would be more familiar to our ancestors, except now we have to support the twin leviathan costs of government run amuck and involuntary social welfare. I'm not passing judgement on this development as I see it; I'm just trying to make a buck just like the next guy. Holding down a specialized job in a single career is likely to remain an ever-vanishing prospect for increasing numbers of people.

By the way, if there are other Freepers who are interested in doing the kind of work I described, I'd be happy to fill them in on the details. Breaking into my part of the industry at the entry level is pretty hard right now, but still possible for very motivated folks.